Organic Flower Investments Group Inc. (CSE: SOW)(FWB:
2K6)(OTC: QILFF) ("Organic Flower" or
“OFIG” or the
“Company”) is
pleased to announce the Company has entered into a definitive
agreement (the “Purchase Agreement”) to acquire an 80 per cent
interest in The Edibles and Infusions Corporation (“Edibles and
Infusions”); thus conceiving a Joint-Venture (the “JV”) with one of
North America’s largest and most storied manufacturer and
distributor of chocolate and sugar confectionary products (the “JV
Partner”).
Edibles and Infusions will design and develop a 50,000 square
foot manufacturing and product formulation facility (the
“Facility”), located in Winnipeg, Manitoba. The Facility will be
operated by a roster of experienced chocolatiers and confectioners,
as well as equipped with industry leading manufacturing equipment
capable of producing an assortment of both
cannabinoid/terpene-infused products for medicinal, functional and
adult-use, including:
- Gourmet snacks, including caramel popcorn, cheese biscuits,
cocoa cookies, glazed pecans, and salty pretzels;
- Chocolates/toffees/caramels;
- Gummies/confectionary/gum;
- Baked goods;
- Flavoured tinctures;
- Powdered drinks; and,
- CBD-infused pet products
Edibles and Infusions is working to finalize its applications
for a Health Canada Standard Processing License, as well as a
Cannabis Sales License. Organic Flower anticipates the Facility
will be fully operational by the first quarter of 2020 and once
optimized will be capable of generating in excess of $750 million
in annual sales revenue.
Edibles and Infusions is also negotiating various contract
manufacturing agreements with Tier 1 Canadian Licensed Producers,
in anticipation of the completion of the Facility.
Joel Dumaresq, Chief Executive Officer and a Director or
Organic Flower stated: “Establishing a controlling stake in this JV
is truly transformative transaction for Organic Flower. Along with
our highly reputable JV Partner, we have firmly positioned
ourselves at the forefront of the next phase of cannabis
normalization- ‘Cannabis 2.0’. Armed with this state-of-the-art
facility, Organic Flower expects to become the unequivocal leader
within the highly lucrative cannabinoid-infused edibles and
functional food marketplaces”.
The JV’s downstream capabilities will be buoyed by one of
Canada’s leading sales forces, affording Edibles and Infusions the
ability to secure immediate shelf space across all major retail
channels, including:
- Groceries;
- Pharmacies;
- Convenience stores;
- Gas stations; and,
- Quick service restaurants
Organic Flower’s JV Partner was established nearly a century ago
and has since become North America’s largest confectionary fruit
slice manufacturer; supplying products to over 20,000 locations
across North America- most prominently Costco and Wal-Mart. The
Company’s JV Partner manufactures and distributes several hundred
unique stock keeping units (“SKUs”). The JV Partner’s top revenue
generating SKUs, which can be reformulated to permit low-touch
infusion of cannabinoids include:
- Assorted large fruit slices (Premium private label);
- Assorted mini fruit slices (Premium private label);
- Sunsations (Private label Pectin based round jellies);
- Satin mix;
- Mint baby pillows;
- Assorted baby pillows;
- Fruit drops;
- Toasted coconut marshmallow;
- Christmas ribbon; and,
- Neapolitan Squares
The development of the JV’s state-of-the-art manufacturing
facility further will position Organic Flower as the premier
domestic vertically integrated cannabis company. This transaction
affords the Company preeminent exposure to complementary product
development and downstream assets within the burgeoning
cannabinoid-infused and functional foods vertical.
The marketing and eventual distribution of the JV’s
cannabinoid-infused product lines will follow additional testing
and will be subject to necessary approvals and licences to be
granted by Health Canada, as well as regulatory authorities in
other territories.
Organic Flower’s JV Partner boasts established industry
relationships, as well as access to best-in-breed supply chain
management infrastructure. The Company’s JV Partner will leverage
its extensive operating experience to:
- Expedite product to market;
- Design cutting-edge packaging protocols;
- Source superior raw product inputs; and,
- Develop premium product formulations
Laurel Fletcher, President of Organic Flower’s JV Partner
stated: “We are ecstatic to welcome Organic Flower into our family.
With three generations of confectionery manufacturing experience,
we understand the importance of quality. We are confident that
together with Organic Flower, we are tactically positioned to
capture a large portion of the CBD/THC market”.
Under the terms of the Purchase Agreement, Organic Flower will
acquire an 80% interest in the Edibles and Infusions JV for an
aggregate purchase price equal to up to $42.5 million, payable in
common shares in the capital of the Company (“Aggregate Purchase
Price”). Of the Aggregate Purchase Price, Organic Flower will pay
$10 million at closing, comprised of common shares of Organic
Flower (each an “Organic Share”) at an attributed value of $0.50
per Organic Share. Organic will issue up to an additional $32.5
million Organic Shares at an attributed price equal to a 5-day VWAP
at the time of issuance, upon the JV achieving certain milestones
throughout 2022. Pursuant to the JV, Organic will fund up to $15
million to develop the Facility and issue up to $9 million of
Organic Shares to the manager of the JV based on the manager’s
achievement of certain milestones throughout the term of the
JV.
In addition to acquiring an 80% interest in the Edibles and
Infusions JV, Organic Flower has also acquired an option (“Option”)
to purchase certain business assets of the JV Partner for the
purchase price of $12.5 million. As consideration for the grant of
the Purchase Option in favour of Organic Flower, the Company has
agreed to issue: (i) $1 million of Organic Shares for the Option to
be exercisable within six (6) months of the Option grant; and(ii)
an additional $1 million Organic Shares to extend the exercise
period of the Option for an additional six (6) months. The value of
the Organic Shares issued for the Option is based on a 5-day VWAP
at the time of issuance.
The Organic Shares issuable on the acquisition of the JV
interest and the Option are subject to a hold period of at least
four (4) months and one (1) day. The closing of this acquisition is
subject to customary terms and conditions.
ABOUT ORGANIC FLOWER INVESTMENTS
Leveraging strategic relationships, proprietary investments and
exclusive partnerships with preeminent international cannabis
cultivators and formulators for the development of best in class
products and brands to be marketed and distributed throughout our
global footprint.
Via its wholly owned subsidiary, Delta Organic Cannabis Corp.,
Organic Flower is launching one of the largest and most efficient
cannabis facilities on the planet.
ON BEHALF OF THE ORGANIC FLOWER INVESTMENTS GROUP INC.
BOARD OF DIRECTORS
“Joel Dumaresq”
Joel Dumaresq CEO, Director +1 (604)
687-2038info@sowcannabis.ca
Learn more about Organic Flower by visiting our website
at: https://sowcannabis.ca/
THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.
Notice Regarding Forward Looking
Information:
This news release contains certain
"forward-looking information" within the meaning of applicable
Canadian securities law. Forward-looking information is frequently
characterized by words such as "plan", "continue", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed" and other similar words, or
information that certain events or conditions "may" or "will"
occur. This information is only a prediction. Various assumptions
were used in drawing the conclusions or making the projections
contained in the forward-looking information throughout this news
release. Forward-looking information includes, but is not limited
to: political changes in Canada and internationally, future
legislative and regulatory developments involving cannabis in
Canada and internationally, the Company’s ability to secure
distribution channels in international jurisdictions, competition
and other risks affecting the Company in particular and the
cannabis industry generally. Without limiting the generality of the
foregoing, the forward-looking statements herein relate to, among
other things: the development of the Facility in a timely manner,
the application and issuance of a Health Canada Standard Processing
License and a Cannabis Sales License, the optimization of the
Facility according to schedule to generate annual sales revenue,
the negotiation of various manufacturing agreements with Licensed
Producers on terms acceptable to the Corporation, and the general
growth of the cannabinoid-infused edibles and functional food
marketplaces.
The forward-looking information contained in
this release is expressly qualified by the foregoing cautionary
statements and is made as of the date of this release. Except as
may be required by applicable securities laws, the Company does not
undertake any obligation to publicly update or revise any forward-
looking information to reflect events or circumstances after the
date of this release or to reflect the occurrence of unanticipated
events, whether as a result of new information, future events or
results, or otherwise.
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